Juniper Networks has reportedly agreed to pay $169 million to settle a 4-year-old lawsuit over backdating stock options, a practice that entrapped and embarrassed many high-tech firms over the past decade.

Backdating is an accounting practice in which the dates and amounts on employee stock-options are changed to boost the value of those options. Scores of companies – including many big name high-tech firms – and their top executives were investigated and charged with criminal infractions, and sued by their shareholders.

According to a report by the Associated Press, the penalty is significant for Juniper in that it represents more than half of the company's total profits from last year. It is also one of the biggest settlements of options backdating penalties to date, the AP states.

Managed care company UnitedHealth Group had to pay a $935 million backdating settlement in 2008. Comverse Technology and Broadcom also had to pay stiff penalties last year, to the tune of $225 million and $160 million, respectively.

The Juniper settlement was reached this week by lawyers for the company and a group of New York City pension funds that had invested in Juniper. The settlement must be approved by a federal judge in San Jose, the AP reports.

"This litigation arose from events that occurred more than six years ago relating to the granting of stock options to employees generally," said Mitchell Gaynor, Juniper's senior vice president and general counsel, in a statement e-mailed to Network World. "Those practices have long been eliminated and new controls put in place. We are pleased to put this longstanding matter behind us and do not expect the payment of this settlement to have any ongoing effect on our business operations."

In 2007, Juniper settled Securities and Exchange Commission charges over its options practices. The company did not admit wrongdoing and did not have to pay a fine.

The company took an $894.7 million pretax charge for the years 1999 to 2005 to account for inappropriately inflated options grants.

Separately, Juniper this week formed a new business group and reassigned three executives. The company says these moves will help drive the "New Network" initiative unveiled last fall. The adjustments also indicate the company is placing an increasing focus and reliance on software for growth, an expected emphasis since ex-Microsoft executive Kevin Johnson took the reins as Juniper CEO almost two years ago.

The new business group – the fourth in Juniper's organizational structure – is called Junos Ready Software. The group is charged with creating and delivering software and applications built on the Junos operating system, including new programs for mobility and video, automation of network tasks, and value-added services.

The Junos Ready Software group includes the company's Project Falcon program for Junos-based mobility products; the Junos Space network application development platform; and Juniper's software partner ecosystem. The group will be headed by Executive Vice President and General Manager Manoj Leelanivas, an 11-year Juniper veteran. He will report to CEO Johnson.

Leelanivas most recently served as senior vice president and general manager of Juniper's Edge and Aggregation business unit.

Other Juniper executives reassigned include Kim Perdikou (see interview with Perdikou), a 10-year Juniper veteran, who most recently served as executive vice president and general manager of Juniper's Infrastructure Products Group (IPG). She will now move to a newly created position working directly with Johnson to focus on Juniper's relationships with service provider customers and partners.

IPG will now be led by Executive Vice President Stefan Dyckerhoff. Dyckerhoff, an original member of Juniper's engineering team during the company's first seven years, recently rejoined Juniper from Cisco.

While at Cisco, Dyckerhoff served as vice president and general manager of the Edge Routing business unit, responsible for managing a multibillion-dollar product portfolio targeted at both the service provider and enterprise markets. He will report to Johnson.

Jim Duffy has been covering technology for over 28 years, 23 at Network World. He covers enterprise networking infrastructure, including routers and switches. He also writes The Cisco Connection blog and can be reached on Twitter @Jim_Duffy and at jduffy@nww.com.